New Shanshui CEO confident of fighting off rivals in China’s cement war

Preparing to board a plane for a showdown with the father-and-son duo who founded and, until recently, ran China’s seventh largest cement maker, Li Heping is confident of victory.

“Old Zhang and Young Zhang don’t want to give up their power...(my success) will happen very fast. Because according to the law, any lawful thing will happen quickly.”

As the newly appointed chief executive of Hong Kong-listed China Shanshui Cement Group, Li has helped spearhead an ugly seven-month-long shareholder brawl that led to a bond default, triggered an ongoing share suspension, and eventually resulted in 96 per cent support among voting shareholders to oust the entire board including chairman Zhang Bin, and to appoint a new one led by the largest shareholder, China Tianrui Group Cement. Zhang’s father, and company founder, Zhang Caikui, was removed by shareholders in October.

Talking to the South China Morning Post in his room at the J.W.Marriott hotel in Admiralty on Friday, Li said the newly installed board now controls 102 out of 109 Shanshui operations in China. The remaining seven are in Jinan, Shandong province, Zhang’s power base and the city to which Li was flying out to later that night.

Shandong Shanshui Cement is Shanshui’s main operating subsidiary. Shandong accounted for 67 per cent of its sales in the year’s first half.

READ MORE: Bitter boardroom battle in China Shanshui Cement sees old board thrown out as accusations fly

“The factories we took over are running very well. Because we didn’t take over the factories in Jinan, we don’t know what is happening there,” said the 59-year-old Li wearing black loafers, dark blue chinos and a blue t-shirt with the Agnes B logo written across his chest. The portly Li would not comment on any potential drop in revenues or what the loss of control in Jinan means for Shanshui’s earnings.